Articles on Stock markets

News, Research and Analysis

Help Center
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement Accounts
Personal Finance
Corporate BasicsBasicsCorporate StructureCorporate FundamentalsCorporate DebtRisksEconomicsCorporate AccountingDividendsEarnings

What is a Partnership?

A partnership is a business owned by two or more people, usually designated as an LLC. They play a role in the operation of the business, and are responsible for the legal and financial liabilities.

In a partnership, as in a sole proprietorship, there is no legal shield against law suits and liabilities unless they have filed as an LLC or S-Corp. If the partnership were to be sued, without any kind of legal shield in place, the owners would be held completely accountable.

Often a partnership has a general partner who runs day-to-day operations and limited partners who have contributed capital to the business but have no say in the daily operations.

Limited partners are, of course, entitled to their proportional share of profits. These arrangements can be filed as Limited Partnerships and provide asset protection for anything a limited partner owns outside of the amount invested in the partnership.

At the end of the year, the partners will receive so-called K-1 forms, which will show the partnership’s earnings and the allocation of the profits.

Keywords: Limited Liability Company (LLC), Form K-1, S-Corp, partnerships, Limited Partners (LP),
Am I Eligible for Social Security Benefits?How Much will Life Insurance Cost Me?What is Bond Yield?What is Accidental Death and Dismemberment Insurance?What is Foreign Investment Funds (FIF) tax?How to Trade Moving Averages: The Death Cross